Biotechnology, main street center, city hall, and parks mark transition to 21st-century economy

Small towns across Northern Michigan are harnessing brownfield grants, tax credits, and incentives to grow innovative businesses and jobs on once-contaminated and abandoned land, where the traces of a 19th- and 20th- century economy built on logging and manufacturing still linger in the water and the soil.

In Scottville, a new biotechnology firm that grows gourmet mushrooms has settled into an abandoned bean processing plant. In East Jordan, developers are modernizing two historic office buildings with the help of brownfield tax credits. And in Frankfort, a new city hall, a harbor-side bike trail, and improved parks mark yet another milestone in Northern Michigan’s transition to an economy based on enjoying, not exploiting, our natural resources.

At a time when small towns across the country are losing jobs and young people, the energy and entrepreneurial spirit around redeveloping brownfields is a hopeful sign of an emerging 21st-century prosperity built on healthy land, water, and communities.

Scottville: Hi-Tech Mushrooms

Mac McClelland

Under reconstruction: Ludington’s Harbor Terrace condominiums.

Just as he’s mastered fast-moving advances in the biotechnology that underpins his company’s success, Gary Mills has figured out how to make Michigan’s brownfield redevelopment program work for his company and county.

In October 2003, Mr. Mills established Diversified Natural Products Inc., a biotechnology company, in an abandoned Chiquita bean processing plant in Scottville, a Mason County farm town east of Ludington. His proposal to invest $9 million in growing gourmet mushrooms was enthusiastically embraced by Mason County, which lost more than 400 manufacturing jobs in the last decade.

That initial investment, he said, would lead to producing bio-based fuels and chemicals, as well as some other natural food products. Part one of the ambitious plan, growing mushrooms, would generate 51 new jobs.

Much of Mr. Mills’ proposal hinged on attracting a $750,000 brownfield single business tax credit to defray the cost of demolishing the old plant and cleaning up fuel leaking from tanks there. In April 2004, the state awarded the tax credit, lauding the company as a prime example of the entrepreneurial spirit that the brownfields program encouraged. The company also benefits from capturing roughly $350,000 in local taxes for environmental cleanup.

Diversified Natural Products is now establishing itself as a bona fide player in the industrial biotechnology economy and is planning to expand one facility to make “bio-based polymers” for plastics, a project it is undertaking with a French company.

The fast start is due in part to Mason County officials, who have led local government efforts in northern Michigan to build a new, modern economy by attracting redevelopment funds and tax credits for cleaning up old, toxic messes. The demolition and cleanup at Mr. Mills’ site is one of nine projects approved by the county’s Brownfield Redevelopment Authority. In all, $5.5 million in brownfield redevelopment incentives leveraged $85 million in private investment, mostly in Ludinginton, and established 135 new jobs, according to the authority.

“Brownfield redevelopment has become a cornerstone of our community economic development strategy,” said Bill Kratz, the director of the Mason County Economic Development Corporation.

East Jordan: A Main Street RevivalWhen East Jordan’s early 21st-century history is written, Floyd Wright may well have earned himself a downtown monument. Mr. Wright, a Boyne City builder, is turning two historic century-old landmarks in downtown East Jordan — the Porter Lumber Company and the Vortuba Hardware Store — into a modern retail and office center. The three-story project, a lynchpin of East Jordan’s redevelopment plan, has gained recognition from the State Historic Preservation Office.

The $2.55 million effort, which generated 30 new jobs, was helped by persistent historic preservationists and a $255,000 state brownfield single business tax credit. “The availability of the tax credit was a critical factor,” said Mr. Wright. “It helped attract our partner, Charlevoix State Bank, which was looking for a presence here, to the project.”

The Porter Lumber Company building, once a stately office building, had fallen into disrepair in this town of 2,500. Most thought the building should just be torn down. But Mr. Wright, city manager Dave White, and economic development director Rod Benson thought that the building could catalyze downtown revitalization.

In 1999 Mr. White helped establish the East Jordan Brownfield Redevelopment Authority to guide brownfield redevelopment grants, loans, and credits to Mr. Wright and other East Jordan historic preservationists.

“We knew there were opportunities and Floyd came in with just the right project,” he said.

Frankfort and Elberta: Reviving Betsie Bay

Keith Schneider/MLUI

Frankfort’s new city hall.

With its 1,500 mostly satisfied residents, Frankfort is on a roll. Home values in the Benzie County town are rising quickly. The school district just built an airy, light-filled gymnasium for its winning high school girls’ basketball team. And Frankfort recently opened one of the most architecturally distinguished new city halls in small-town Michigan.

What accounts for this growing civic wealth and hard-earned stability? One answer is that Frankfort’s business and political leaders understand that their Lake Michigan town is leaving behind its days as a lumber, shipping, and agriculture center. The town’s maritime geography, with its scenic waterfront and small-town charm, remains the basis of Frankfort’s new economy, but the old economy left behind some brownfields and blighted properties.

So Frankfort decided to enhance and redevelop the properties, improve city parks, and attract new businesses. The city established a brownfields redevelopment authority in 2000 with tax increment financing jurisdiction to direct the assessment, cleanup, and redevelopment of blighted lands. The immensely successful redevelopment authority garnered what may be the greatest amount of discretionary federal dollars per capita of any northern Michigan community.

In 2000, Frankfort received a $200,000 brownfields redevelopment pilot grant from the EPA to help city officials assess and prepare five brownfield parcels for redevelopment along Betsie Bay, the city’s harbor. Two years later, the EPA provided another $150,000 brownfield grant to continue the work. In 2003, the federal Department of Agriculture awarded Frankfort a $1.3 million rural development loan to develop a new city hall. Lastly, the state awarded Frankfort $680,000 for new parks, beautification of the town’s primary streets, and a new bicycle trail that runs along Betsie Bay. Today the town sports a new face that attracts all kinds of suitors investing in new homes and businesses.

Meanwhile, across Betsie Bay, tiny Elberta is also rebooting its economy. The village of 450 people is reckoning with the legacy of an Ann Arbor Railroad terminal yard that served as its waterfront by recognizing the value of brownfields redevelopment and establishing one of northern Michigan’s first brownfield authorities in 1997. The authority approved a brownfields plan for the railroad yard and bought that land from the state Department of Transportation.

After Elberta received a waterfront redevelopment grant under the Clean Michigan Initiative for a marina and a waterfront park, it began its transformation into a maritime magnet for new housing, businesses, shops, and restaurants. The park is done; among other things, it hosts a two-week Shakespeare festival each summer. The rest of the transformation is well under way.

Keith Schneider is the Michigan Land Use Institute’s deputy director. Reach him at keith@mlui.org. Mac McClelland is the manager of brownfield redevelopment at Otwell Mawby, P.C., in Traverse City. Reach him at mac@otwellmawby.com. To read or download New Plans for Barren Lands in its entirety, click here.